Which Operating Segments Are Reportable Under the Profit or Loss

question 75

Multiple Choice

Which operating segments are reportable under the profit or loss test?

• A) Rakes, Pails, and Shovels.
• B) Rakes, Pails, Shovels, and Hardware.
• C) Rakes, Pails, and Hardware.
• D) Rakes, Pails, Shovels, Hardware, and Accessories.
• E) Pails and Hardware.

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Definitions:

Profitability Index

A calculation used to assess the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Internal Rate Of Return

A financial metric used to estimate the profitability of potential investments by calculating the discount rate that makes the net present value of all cash flows equal to zero.

Discounted Cash Flow

A financial analysis technique that estimates the value of an investment based on its expected future cash flows, discounted back to their present value.